In a surprising turn of events, Do Kwon, a South Korean co-founder and CEO of Singapore-based Terraform Labs, the parent company of crashed stablecoin TerraUSD and cryptocurrency Luna, has allegedly been arrested in Montenegro.
The former “cryptocurrency king” is one of the most wanted fugitives, with rumors of his whereabouts circulating for months. He was reportedly hiding in Serbia before being caught in Montenegro.
Montenegrin police awaits official confirmation of identity
The news was first announced by Montenegro Minister of the Interior Filip Adzic in a tweet on Thursday, where he stated that an individual suspected to be Do Kwon had been apprehended at the Podgorica airport. However, the Montenegrin police are still waiting for official confirmation of his identity.
According to Minister Adzic’s tweet, Do Kwon was detained with falsified documents, which will likely lead to additional charges. It remains to be seen how the arrest will affect Terraform Labs and the wider crypto industry. The news is likely to send shockwaves through the community, as it highlights the need for stronger regulations and accountability within the space.
Do Kwon is the mastermind behind Terraform Labs, the company responsible for TerraUSD, a stablecoin that crashed last year. The TerraUSD stablecoin was designed to maintain a constant $1 value using a mix of algorithms and trader incentives involving a sister token, Luna.
However, after a wave of sell-offs hit the crypto market, the algorithmic stablecoin lost its dollar peg, wiping out around $40 billion from the crypto market and delivering huge losses to investors.
While Terraform Labs partially repaired the peg by purchasing $2B UST, the continued sell-off drained those funds, hyperinflated UST’s sister token LUNA, and crashed the price of both LUNA and UST. The unprecedented crash was a major blow to the crypto industry, and Do Kwon has been on the run ever since.